Transcontinental move lands market research firm in Philly
Philly should be throwing a parade for Scott Kesterson, or at least buying him a snort of his favorite bourbon, Michter's.
Philly should be throwing a parade for Scott Kesterson, or at least buying him a snort of his favorite bourbon, Michter's.
It's not every day that a small business moves across the country to Philadelphia. Even more rare is when the owner of that business has no personal ties here.
"I never thought I'd be a Northeast guy," said the native of southern Oregon.
Research is what led Kesterson, 51, to relocate his Spatial Terra, a four-year-old company specializing in a complex blend of market research, risk-mitigation analysis, and consulting, from Portland - a city often associated with progressiveness - to Philadelphia - a city that consistently does not score well in national rankings of best places for small business.
"The ranking things don't tell you the right story," Kesterson said. These are what matter to him:
Historically Underutilized Business (HUB) Zones, a U.S. Small Business Administration designation that helps small businesses gain preferential access to federal procurement opportunities.
Easy train and highway access to other metropolitan areas.
Proximity to a major airport.
Cost of living.
Leasing costs.
Nightlife and a variety of activities, from restaurants to sporting events.
An opportunity "to be part of the uptick in growth, not arrive at the zenith."
Kesterson also applied those parameters to Wilmington; Dallas; Alexandria, Arlington, and McLean, Va.; Brooklyn; Summit, N.J.; and Boston.
"Collectively, Philadelphia comes out and screams as the best place on the East Coast," he said during a recent interview. "It's like the hidden gem."
So last month, Kesterson moved Spatial Terra into 1,700 square feet of offices in a recently renovated warehouse on Martha Street in Fishtown, next door to the Red Brick Craft Distillery.
That will come in handy to help stock the after-hours bar he plans to include somewhere near the kitchenette for what he largely envisions will be a staff of twenty- and thirtysomethings.
"I am not going to build a company of greatness by relying on hiring people my age," he said, sipping a latte made with almond milk and an extra shot of espresso at one of Fishtown's wow-factor venues: the palatial La Colombe coffeehouse, bakery, and rum distillery on Frankford Avenue.
Spatial Terra (www.spatialterra.com) has two employees besides Kesterson - working in Maryland and North Jersey - and expects to exceed $1 million in revenue this year. The company has been profitable since its first year.
Because Spatial Terra is self-funded with no debt, Kesterson is not aiming for wild growth and to be acquired, but rather for "careful" growth, possibly to 10 local employees in the next 18 months and $10 million in revenue in five years.
"The idea is to be a legacy company," he said. "For the foreseeable future, Philadelphia will be its hub and home."
So what was wrong with Portland?
Kesterson said the start-up market is not huge there, largely because there isn't a lot of venture capital. Plus, the cost of living is high and the size of the downtown too small to attract enough of the demographic Kesterson wants.
As my colleague Jane Von Bergen detailed last Sunday in a piece on Fishtown's small-business boom (http://www.philly.com/boom), much of the growth is from companies of just a few employees rather than a few dozen. It is fueled by rents lower than those in nearby hot spot Northern Liberties, and certainly those in Center City - which newcomer Kesterson called "the Main City" during our meeting. He also called I-95 "the freeway."
But he's a quick study, making a living analyzing cultures, both business and social.
"He's seen societies from all levels," said Peter Arsenault, someone who has both used Spatial Terra's services and is now doing consulting for the company from Windsor, Conn. "He's able to bring some of those cultural challenges that each face and stimulate thought processes."
So mastering the Philly art of ordering a cheesesteak "wit" or "witout," or knowing that "the great river area" to which Kesterson referred is called "Boathouse Row," should not be a problem for the 1988 graduate of Oregon State University. He earned a bachelor's degree in social history based on revolution and change.
After that, Kesterson moved to Florida, where he worked for McDonald's and Costco, and to Minnesota, where he was a national director of marketing at Central Boiler, which manufactures and distributes outdoor wood furnaces. He returned to Oregon in 1999 to restructure the family remodeling business to focus on specialty construction for outdoor living spaces.
In the mid-2000s, he won an Emmy for documentary work in Afghanistan, to which he later returned for consulting work.
Back in Oregon, he started Spatial Terra in 2012. He has been frequenting the East Coast ever since to visit clients in the defense industry.
Which brings us to his move to Fishtown, where Kesterson also found a place to live.
On the morning of March 25, he sent an email saying his belongings had arrived:
"I am full on now a resident of Philadelphia! Exciting."
215-854-2466@dmastrull